Al Root
Boeing stock rose early Tuesday after the Justice Department announced over the weekend a new nonprosecution agreement with the aerospace firm related to two deadly 737 MAX crashes in 2018 and 2019.
Shares were up 1.6% at $205.60, while S&P 500 and Dow Jones Industrial Average futures were up 1.6% and 1.4%, respectively. Stock markets were higher after President Donald Trump over the weekend delayed the implementation of tariffs on the European Union until July. Trump said Friday that 50% levies on goods from the bloc would begin on June 1, helping send the S&P 500 down 0.7%.
Under the new agreement with Boeing, the company won't be branded a felon. In exchange, the company will pay an additional $445 million to a crash victims' fund, and an additional $244 million fine. Boeing has also agreed to more safety oversight.
Boeing didn't immediately respond to a request for comment about the agreement.
The 737 MAX was grounded worldwide shortly after the second tragic crash. Both accidents were tied back to faulty flight-control software. The plane didn't fly commercially again until November 2020.
In 2021, Boeing agreed to a deferred prosecution agreement to settle fraud charges that the company misled government regulators about its flight-control software. As part of the original agreement, Boeing paid fines totaling some $2.5 billion, including a $244 million criminal penalty, $1.8 billion to MAX airline customers, and $500 million for the families of the 346 victims of the two MAX crashes.
That agreement was set to expire in January 2024, just after an emergency-door plug blew out of a 737 MAX 9 while it was in flight. The incident led the government to void the original agreement.
Investors were prepared for new fines, and avoiding criminal prosecution is a positive development. The new agreement won't materially impact Boeing's balance sheet. It's in better shape after a recent asset sale and capital raising.
The new agreement is another step on the company's turnaround path. Boeing hasn't reported a full-year profit since 2018, the year before the second tragic MAX crash. Wall Street sees profits returning in 2026 as Boeing slowly ramps up production to meet a growing backlog of orders.
The company has unfilled orders of about 6,300 jets. It's expected to deliver fewer than 600 in 2025.
Write to Al Root at allen.root@dowjones.com
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May 27, 2025 07:59 ET (11:59 GMT)
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